Stephen S. Roach, former Chairman of Morgan Stanley Asia and the firm's chief economist, is a senior fellow at Yale University's Jackson Institute of Global Affairs and a senior lecturer at Yale's School of Management. He is the author of the new book
Unbalanced: The Codependency of America and … read more

Comments

I see in this pro-consumer –domestic rebalancing as opposed to labor intensive exports a new challenge for the developed world as in this dynamic the biggest impact would be on ‘dollar savings’ that China orchestrates, the gluttony of which impedes on the interest rates to zoom as the marginal savings rate helps to leeway to the float that U.S. Treasury needs. This will further direct the economy to raise its wage rates as the domestic sector would get the much needed fillip from the rise in the domestic demand. This will be the tipping point, for China, its impact on the rest of the world needs to be evaluated.

For a banker, the author evinces an extraordinary faith in the ability of the Chinese leadership to control and manage the Chinese economy. Given how little they know about so many aspects of it, their perverse incentives, and the surety that the unintended consequences of any policy will outstrip the intended consequences, I wouldn't be so sure that stability can be maintained. After all, even the degree of urbanization in China is both uncertain and subject to widespread manipulation and misrepresentation (See "“Facts” Everybody Knows – Statistical Cautions about the BRICs: http://silberzahnjones.com/2011/04/08/statistical-cautions/).

This desperate attempt by the Chinese leaders, described in the article reflects our human concern, that we always try to remain in control, that we feel ourselves above the system we live in and believe we can direct everything around us, mostly by force and coercion, keeping a tight grip on things.At the same time what we learn through the global crisis is that even institutions we ourselves created, our social, political or economical system just to mention the most obvious, are slipping through our fingers, are falling apart, and we are standing after our whole evolution so far, at the point of not knowing who we are and where we are, and especially where we should be heading.So does this mean that the western point of view, especially the US Republican point of view asking for total freedom, minimal central control, that everybody can basically do whatever they like is the right approach, or the "balanced European" approach is the right one?Unfortunately none of them are correct. It does not matter which approach we choose until we do not understand the vast natural system we are just part of, and we do not accept that in order to succeed, to have a sustainable future and to survive we need to harmonize ourselves with this system.Our inherent human nature is all about subjective self calculations, maximum self profit with minimum or zero concern for others or for the environment we exist in.The vast natural system around us is based and is surviving by homoeostasis, all the elements of the system (except humans) instinctively following this law of overall harmony and mutuality.Even our healthy human body is based on the same principles, still when it comes to how we relate to each other or to the environment around us we fall back into our selfish, egoistic nature.Today as even humanity has evolved into the global, integral network, from which none of us can escape, break out, we cannot ignore the laws of integral systems.It is as if so far "we were given" a loose, free playground, a vacuum where we could experiment with different models, go through different stages, but from now on the "playtime" is over and we need to mature and adapt to the system.The Chinese leaders are not alone in their search for the perfect formula for the future, the whole of humanity is in it together.And as it happens in global, integral systems the answers can only come when we truly start to cooperate, in a mutually responsible fashion, for the benefit of the whole system, taking into consideration all of its elements.

Alberto Bagnai, ET AL
want the Greek government to abandon the euro – and all other eurozone members to follow suit.

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